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Global markets: Indices closed in the red

Jun 28, 2003

US markets closed the week in the negative. While the Dow closed down 2%, the NASDAQ also closed lower by 1% for the week. During the week investors focus was on the Fed's policy setting meeting to discuss the direction interest rates might take and also indications about the US economic growth going forward. Investor apprehension led to weak sentiments on Monday.For the next two days also, indices closed in the red. This was on account of the Fed's statement that the US economy still failed to show any signs of recovery till now. Market sentiments remained weak on account of this statement made by the Fed. Despite this the Dow managed to gain marginally on Tuesday.

On Thursday however, the indices bounced back. This was on account of last week's unemployment numbers announced on Thursday. The numbers despite being marginally above the benchmark levels were better than the previous week. This improvement in unemployment numbers came after about four months and this cheered investors. However, investors booked profits on Friday and this led the indices to close in the negative for the week.

Indices21-Jun-0328-Jun-03Change
BSE 3,500 3,583 2.4%
Nikkei 9,120 9,104 -0.2%
Dax 3,239 3,225 -0.4%
NASDAQ 1,645 1,625 -1.2%
FTSE 4,160 4,068 -2.2%
Dow 9,201 8,989 -2.3%
Hang Seng 9,930 9,657 -2.8%

World over, markets saw weakness during the week. While, the Asian markets managed to recover losses on Friday, they closed marginally in the red for the week. European indices remained subdued during the week on account of cut in the profit forecast by Unilever and Heineken, the worlds third largest brewer, which dampened investor sentiments. However, the BSE Sensex gained ground during the week on account of broad based buying seen across sectors.

(Price in US $)21-Jun-0328-Jun-03Change
MTNL4.34.811.0%
Infosys49.954.910.0%
Satyam Infoway5.55.97.6%
Dr. Reddy's22.322.72.0%
VSNL5.15.21.6%
ICICI Bank7.07.11.1%
Wipro23.323.30.0%
Satyam9.79.6-0.6%
Silverline1.81.8-1.1%
HDFC Bank19.018.4-3.3%

Barring MTNL and Infosys, Indian ADRs remained lacklustre throughout the week. MTNL was the top gainer during the week. The stock gained about 11%. Increase in optimism towards the stock was on account of the Indian government asking the divestment ministry to consider the case for privatisation of MTNL. Infosys also gained strength during the week. Expectation that Infosys may revise its guidance upwards increased the interest towards this stock. During the week, Infosys gained about 10%.

In the last three weeks, US indices closed in red for about two times. Since there is no clear sign of economic recovery as indicated by the Fed during its policy setting meetings and also the fact that the labor markets are still contracting, sentiments could remain cautious going forward. Next week will see a number of economic reports. However no corporate results are expected for the recent quarter, which will end on Monday. Hence the investor sentiments will remain focused towards the economic reports and this will further give an indication of where the world's largest US economy is heading.


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